'Tontine' credit helps Senegal women do business

After months of waiting, Ndeye Khari Pouye, 50, has finally won the "cagnotte de la tontine," a precious jackpot to help feed her chickens and maintain her livelihood. Sitting on a mat surrounded by other women wearing traditional Senegalese wide-sleeved boubou dresses, she struggles to contain her glee.

"It's my turn!" beams Pouye, who has just won a jackpot of 300,000 CFA francs (just over 450 euros, around $490). Her financial good fortune is the result of a cooperative scheme organised among locals in the Medina area of Grand-Mbao, a neighborhood on the tip of Africa's west coast on the outskirts of the capital Dakar. A common practice throughout Africa, many Senegalese take part in centuries-old microcredit schemes called "tontines" to finance their projects. The name comes from Lorenzo de Tonti, an Italian exiled in France in the 17th century seeking solutions to shore up the French treasury.

The "cagnotte" is the jackpot.

Through the traditional savings arrangement, participants contribute sums of money and take turns collecting the prize. The system helps borrowers overcome difficulties accessing credit as well as avoid prohibitively high interest rates.

"The tontine is the only way for me to save money. Interest rates from the bank are too high," says Ndeye Binta Ndoye, who takes part in four different tontine schemes, including one run by "Aunt Fatou" in another part of Grand-Mbao.

"Financial institutions make you sign loads of paperwork, even things you don't understand. It's too complicated for someone like me who can't read," adds the hairdresser, who did not go to school.

"Each member contributes 2,000 CFA francs (around 3 euros). That makes a total jackpot of 500,000 CFA francs (around 760 euros) which is given to the day's winner," explains "Aunt Fatou", whose real name is Fatou Cisse. She manages the tontine, which counts 250 members and lasts for five years.

In Grand-Mbao, the only other solution is a mutual benefit scheme which requires a guarantee deposit of 20 percent of the loan at an interest rate of 1.77 percent, to be paid back over 10 months, according to a source familiar with the system.